Vail Resorts (MTN) is expected to see lower earnings and fewer visits this year due to poor snowfall in the Rocky Mountains, though recovery is expected in 2027, Morgan Stanley said in a note Thursday.

The bank said it is lowering its 2026 earnings forecast for the company to $4.77 per share from $6.40, citing poor snowfall in the Rockies, where snowfall was down 43% year over year. The weak conditions reduced Q2 resort visits by 13%. Similar pressure is expected in Q3 if weather conditions remain the same.

Earnings are projected to recover in 2027, helped by more normal weather, higher visitor numbers, and benefits from the company's efficiency initiatives, Morgan Stanley said, adding that it expects resort earnings before interest, taxes, depreciation, and amortization in 2027 to be about 3% higher than 2025 levels.

"As such, we expect the stock to remain range-bound until investors get greater confidence in a credible path to stabilizing and growing Resort EBITDA," the bank said, adding that it is looking forward to the company's March 17 annual analyst day, the first investor event since Rob Katz returned as chief executive officer. Management is expected to provide more detail on the company's long-term growth strategy.

Morgan Stanley adjusted its price target on Vail Resorts to $147 from $151 and kept its equalweight rating.

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